Changes to Housing benefit how much will rents fall?

StevieJ

drc wrote: »

Agreed that there should be a rent cap. It seems ridiculous that the government (Labour/Tory whoever) don't realise that if people have more money to spend on things other than rent, then the money will go into the economy rather than landlords pockets.

Why? don't landlords spend any money?

ukcarper

MikeMaloney wrote: »

It is going to take a while. A lot of these houses will remain empty after the tenants can no longer pay their rents.

The smart landlords will reduce the rent they are asking and keep tenants in there. I do not think the houses charging thousands per week at the moment can afford to drop it to £400 wk.

But will they find someone else to pay that much out of their own pocket instead of the government paying it?

I doubt it.

I wonder how many people get thousands of pounds a week in LHA.

74tnemele

ukcarper wrote: »

I wonder how many people get thousands of pounds a week in LHA.

Its only in London and even after everyone talking about it, they still are getting these thousands every week. The can has been kicked down the road.

angrypirate

StevieJ wrote: »

Why? don't landlords spend any money?

No. It pays off their mortgage which is higher than a buyers mortgage would be as they out bid them, paying over the odds for the property so pricing the FTBers out of the market.

ninky_2

StevieJ wrote: »

Why? don't landlords spend any money?

well they are more likely to horde it / use it to accrue equity.

chewmylegoff

angrypirate wrote: »

No. It pays off their mortgage which is higher than a buyers mortgage would be as they out bid them, paying over the odds for the property so pricing the FTBers out of the market.

the HB changes are going to have the most impact on property that is currently being rented out for £400-£1,000pw. not really FTB properties, as rents at that level imply property values of £500k+

chewmylegoff

ninky wrote: »

well they are more likely to horde it / use it to accrue equity.

in order to "accrue equity", you need to pay off your mortgage. so you pay money to the bank (with interest which makes a profit for the bank and pays all their staff etc) and then the bank can relend the money that you have paid back to it to someone else to buy a property (including legal costs, estate agents fees - yes i know the seller pays them but using money they receive from the buyer - stamp duty etc). and so on.

even if they just put it in a savings account the bank can lend it out.

so it's not 'taken out of the economy', unless the bank is overseas.

ninky_2

chewmylegoff wrote: »

in order to "accrue equity", you need to pay off your mortgage. so you pay money to the bank (with interest which makes a profit for the bank and pays all their staff etc) and then the bank can relend the money that you have paid back to it to someone else to buy a property (including legal costs, estate agents fees - yes i know the seller pays them but using money they receive from the buyer - stamp duty etc). and so on.

even if they just put it in a savings account the bank can lend it out.

so it's not 'taken out of the economy', unless the bank is overseas.

unless you are a cash buyer.

ninky_2

anyhow what's wrong with getting tenants who pay their rent from earned income? unless you can't actually get that rent from an income paying tenant in which case you must lower your rent accordingly.

chewmylegoff

ninky wrote: »

unless you are a cash buyer.

buying property for cash would appear to me to fall into the "spending" category.